Jerseydaze
Senior Member
Starting a new bussiness wich whould you go with .Im going to start as a one man show .
Opinions LLC,Incorperate or Sole Propritership
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hardworkingstiff
Senior Member
- Location
- Wilmington, NC
IMO, if your State allows one-man LLC's, that's probably the way to go. If you do though, you need to file the proper documents with the IRS to allow you to be taxed as a corporation and then taxed as a Subchapter S corporation.
What that does for you is to allow you to take a modest salary and not have to pay Social Security taxes on the profits above the salary. (In case you don't know, that's a 15.3% tax).
If you are a Corporation (and I think this might apply to LLC also) you have an easier time getting medical insurance at a group rate. All of your employees will have to participate to keep it, but if you are the only employee......
There are other things that are just as important. Are you familiar with proper record keeping? Are you doing the books? Are you going to give yourself a W-2 and pay 941 taxes during the year? Do you know about quarterly tax payment requirements? If you are unsure, you should get up with a CPA.
One last very important item. Capitalization. Do you have a budget going forward and do you know how you are capitalizing your business. I owned a pickup truck (payed in full) when I started in 1996 and did relatively small jobs (nothing over about $5,000) for a few months. I did not have any large overhead. In buying tools I didn't have and materials to stock my truck and office supplies/equipment and financing my AR and and and......, I went through about $20,000 before I started taking in more than I was spending. It was the best $20,000 I ever spent, baring none!
Good luck.
What that does for you is to allow you to take a modest salary and not have to pay Social Security taxes on the profits above the salary. (In case you don't know, that's a 15.3% tax).
If you are a Corporation (and I think this might apply to LLC also) you have an easier time getting medical insurance at a group rate. All of your employees will have to participate to keep it, but if you are the only employee......
There are other things that are just as important. Are you familiar with proper record keeping? Are you doing the books? Are you going to give yourself a W-2 and pay 941 taxes during the year? Do you know about quarterly tax payment requirements? If you are unsure, you should get up with a CPA.
One last very important item. Capitalization. Do you have a budget going forward and do you know how you are capitalizing your business. I owned a pickup truck (payed in full) when I started in 1996 and did relatively small jobs (nothing over about $5,000) for a few months. I did not have any large overhead. In buying tools I didn't have and materials to stock my truck and office supplies/equipment and financing my AR and and and......, I went through about $20,000 before I started taking in more than I was spending. It was the best $20,000 I ever spent, baring none!
Good luck.
77401
Banned
This is an excellant place to discuss wiring methods, to permit or not to permit. But you really need to spend the time or money & talk to first a CPA for his reasons why & then with an attorney.
IMHO you can start with a Sole Prop. Paper work is a lot easier. when you income & structure of the business get larger then you have certain tax advantages with LLC's or INC.'s It really all depends on the amount of paper work & how much income you want to pay taxes on & how much Money you can afford to defer into defined benefit plans.
IMHO you can start with a Sole Prop. Paper work is a lot easier. when you income & structure of the business get larger then you have certain tax advantages with LLC's or INC.'s It really all depends on the amount of paper work & how much income you want to pay taxes on & how much Money you can afford to defer into defined benefit plans.
JohnE
Senior Member
- Location
- Milford, MA
I'd start as a sole proprietor. You can always incorporate later. And as 77401 mentioned, I'd strongly suggest hiring a good accountant. And an attorney if you choose to incorporate.
77401
Banned
A lot of people read this & think....Hiring an attorney & CPA? I can't afford this!
Your starting out, already low on cash, scared about even making it in this bizness.
You don't have to hire an attorney & CPA and put them on payroll. Just talk to them, you have to have friends or family or even a customer you can steal some time from to give you a little advice.
Your starting out, already low on cash, scared about even making it in this bizness.
You don't have to hire an attorney & CPA and put them on payroll. Just talk to them, you have to have friends or family or even a customer you can steal some time from to give you a little advice.
JohnE
Senior Member
- Location
- Milford, MA
I think it's been posted before that you can't afford not to hire an attorney and accountant. If not, I'm posting it.
RayS
Senior Member
- Location
- Cincinnati
One big benefit of the LLC and Corp. options is the limitation of liability to business assetsa only, and not personal. Gotta get insured either way, but as a sole proprieter all your personal assets may be on the line also...
petersonra
Senior Member
- Location
- Northern illinois
- Occupation
- engineer
RayS said:
That is one of those "sort of true" things. You need professional CPA and attorney advice to decide what kind of business structure makes the most sense for you.
I find it interesting that people who rail on and on about DIY electrical work seem to think something far more complex (CPA and legal work) can be done by rank amateurs.
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